NEW RULES TO MAKE HEALTH PLANS MORE UNDERSTANDABLE

Consumers to get shorter and clearer summary of coverage

Moving to implement a much-anticipated consumer protection in the new health care law, the Obama administration has issued regulations requiring private health plans to describe what they cover in clear, standardized language that is understandable to consumers. Just six pages long. No fine print.

Starting this fall — for coverage that starts Jan. 1, 2013 — insurers and employers that offer health coverage will have to provide a form that summarizes basic plan information, such as deductibles and co-pays, as well as costs for using in-network and out-of network medical services.

Many big employers currently provide such information to workers during open enrollment. But the federal summary goes further. It requires something new — estimated out-of-pocket costs for two common examples of health care — delivering a baby and managing Type 2 diabetes.

The changes are designed to allow consumers to assess how much their care would cost under different insurance policies, and to simplify the process of evaluating health plans, a task which now can involve reviewing hundreds of pages published by insurers.

And because the summaries will use a single standard format, it will allow “apples to apples” comparisons among health plans that aren’t possible now, said Steve Larsen, the senior Department of Health and Human Services official overseeing insurance regulation, last week. That will help working spouses trying to pick between employer plans, as well as people who buy coverage directly from an insurance company.

The simplified Summary of Benefits and Coverage were mandated by the law signed by President Barack Obama in March 2010.

After insurers and employer groups complained that the forms would be costly and burdensome, the administration put off the effective date until September during open enrollment season, instead of March, and dropped a requirement that health plans include premiums on the forms. The administration also will allow them to comply by providing an online version, but consumers must be told that they can receive a paper copy promptly upon request.

Consumer groups said the new summaries won’t be perfect — they won’t include premiums — but called them a strong start. Administration officials said they ran into logistical problems trying to do that, and that premiums should be easily available anyway, either from their employer or directly from a health plan. Part of the problem with listing premiums is that insurers can currently charge more for the exact coverage to people in poor health.